Poland sued in European Court of Human Rights in Strasbourg for expropriation compensation

Two Torun-based entrepreneurs filed a lawsuit against Poland to the European Court of Human Rights in Strasbourg claiming that compensation for a lost location due to development of infrastructure was inaccurately calculated by the state.

“Real losses of both companies, such as costs associated with movement to another location, suspension of production or lost profits, have not been included in the compensation,” said Artur Kolcz, a solicitor from Ostrowski and Partners law office that represents both entrepreneurs, as cited by Rzeczpospolita daily.

Both entrepreneurs were forced to move to another locations following the construction of a new bridge over the Vistula River. As a result of the move, one company had to release half of its employees, and the other was liquidated. The entrepreneurs are demanding more than PLN 7 mln in compensation from the state.

In accordance with the Polish regulations on expropriation, an expropriated party is entitled to compensation that is calculated based on a value of lost real estate. There is no mention, however, of any additional compensation for the reduction of production or suspension of activities in general.

The case of the two Torun-based entrepreneurs is not  exceptional. Between 2007 and 2013 more than 3,000 km of new roads were built and thousands of Polish companies found themselves in a similar situation, including the president of Lodz-based Enkev Poland, Czeslaw Grochulski, whose claim against Poland is going through international arbitration as from 2012.

Enkev’s plant in Lodz according to local development planning, is due to be divided in half by a new road. The city of Lodz is prepared to pay compensation that would cover only the value of real estates, as per Polish regulations. The compensation, therefore, will not cover the cost of production line or machinery.

Some lawyer argue that if a value of compensation is lower than the real business loss, a supplementary compensation should be awarded. Miroslaw Gdesz, a lawyer specialized in expropriation matters, said that many countries worldwide, including the UK and the US, already introduced compensations for factual business’ losses and that such compensation is usually at a level of 10 percent more than a standard expropriation compensation.

In 2009, Civic Platform (PO), the current ruling party, and Law and Justice (PiS), the opposition, prepared a bill that would change Polish regulations on expropriation. The bill, however, has not been voted through to date.

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